Coal min slaps show-cause notices on 3 more firms

Stepping up drive against companies sitting idle on mines, the coal ministry has slapped fresh show-cause notices on three firms, including Chhattisgarh Mineral Corp.

This takes the total number of companies to 26, which have been warned of de-allocation for not developing the blocks.

"You are hereby called upon to show cause, on each milestone separately, to this ministry within a period of 20 days ... as to why the delay in the development of the coal block should not be held as violation of the terms and conditions of the allotment...failing which...action as appropriate would be taken against your company for deallocation," the ministry said in fresh notices to firms.

The development comes close on the heels of the coal ministry issuing show-cause notices to 23 firms, including SAIL, JSPL, Monnet Ispat, NTPC and GVK Power earlier this month for not developing the mines alloted to them for captive use.

As per the notice, Chhattisgarh Mineral Development Corporation (CMDC), has been issued show-cause notice for failing to develop Sondiha block, alloted in July 2007.

Strategic Energy Tech System has been served notice for failure to develop North of Akhapal Srirampur CTL block alloted in February 2009. Gondwana Ispat received warning for failure to meet development deadline for Majra block, given in October 2003.

The notices to these firms were issued in regard to coal blocks alloted to them between June 2003 and July 2007.

In the notice, the coal ministry said these companies had failed to meet the milestones set for development of mines and production from these blocks. Their progress was found unsatisfactory in review meetings and an Inter-Ministerial Group (IMG) was constituted in June 2012 to look into the matter, it added.

It said the IMG in its meeting on May 1 found "no significant progress in development of coal block" and "noticed that a number of important/critical milestones are pending."

The ministry has also sought a detailed status note on the progress of end use plant by firms which were alloted mines.

As per coal ministry officials, the IMG had decided that show cause notices would be issued to 30 block allocattees.

The crackdown is part of the government's exercise to ensure that the allocated blocks do not remain unproductive.

Last year, CAG in a report had estimated likely financial gains of Rs 1.86 lakh crore to accrue to private firms on account of mines allocation without auction.

The captive coal block allocation issue took political overtures and CBI is also investigating it.

Last year, in a similar exercise, the government had issued show cause notices to 58 coal block allocattees and deallocated blocks of some developers. It also deducted bank guarantees for some others.